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SBG4 FINANCE
SUNDAY BUSINESS GUARDIAN www.guardian.co.tt MARCH 22 • 2015
After two years of
planning and
development,
Bitt---the
Caribbean s first bitcoin and digital
exchange company--- will be launched
on March 30. This means that people
across the region will soon have access
to a software platform for buying and selling cryptocurrencies
and digital commodities with traditional banking integration.
Bitt co-founders Gabriel Abed and Oliver Gale say their plan
is to have digital currencies stand side by side with traditional
currencies throughout the Caribbean in the not too distant
future. Following the company s official launch, bitcoin, the
world s first decentralised digital currency, will become accessible
to citizens across the region, including the estimated 60 per
cent who are currently unbanked, or under banked.
"We serve the international market but are focused and
centred on the Caribbean offering the core services of mobile
digital wallets, international remittances and e-commerce mer-
chant solutions utilising new software called bitcoin and
blockchain," Gale, the company s CFO said.
Bitt, which is based in Hastings, Barbados, is offering a system
that is completely branded, built, designed and managed in the
Caribbean. The company provides high tech systems at a fraction
of the cost of the money transfer systems currently used in the
region.
Gale and Abed, the company s CEO, are of the view that tra-
ditional legacy financial systems are outdated.
"They have huge buildings and many employees. They have
paper systems, centralised management ledgers," Gale said.
Abed explained: "Everything you can pay for in cash, I can
pay for in bitcoin."
Abed s involvement in the world of digital currency was a
natural progression from his educational pursuits. A graduate
of the University of Ontario, Institute of Technology with a
Bachelors degree in Information Technology majoring in Network
Security, his professional qualifications cover cryptography, soft-
ware development and intrusion detection systems.
Abed was introduced to cryptocurrencies in early 2010 during
his undergrad studies but over the past 12 years, he has been
leading software development innovations in the region as part
of a team of dedicated developers.
His business partner, Gale, followed a different academic
route, earning an honours degree in accounting and management
from the University of Bristol. He was introduced to Bitcoin in
2012 and immediately immersed himself in the field,combining
his knowledge of traditional finance with a growing knowledge
of digital finance.
At present, Bitt is run by an eight-member team, headed by
Abed and Gale, as well as three advisers: Peter Tod, Barry Gale
QC and Jeremy Stephen. Once the company is fully implemented,
users will be able to sign up to log on to bitt.com, follow the
instructions and immediately start
accepting bitcoin from anyone around
the world.
The system is being introduced in
response to the need for a better payment systems in the region
to reduce the high costs and red-tape associated with traditional
electronic payment systems.
According to a recent ECLAC (Economic Commission of
Latin America and the Caribbean) report, the Caribbean needs
to lower the cost of remittance services. Digital currencies rep-
resent a potential option for doing just that.
Abed and Gale were in Port-of-Spain last week for a meeting
organised by ECLAC involving regulators and representatives
of digital currency companies. The talks were aimed at developing
a framework for regulation of the system.
At the meeting, held at ECLAC s sub-regional headquarters
for the Caribbean on March 12, Caribbean experts in the field
of digital currency reviewed the opportunities and risks associated
with that type of currency.
They also addressed the potential impact digital currencies
may have on sectors such as banking, e-commerce and remittance
and whether its use can enable improvements to electronic and
mobile-based payment systems and low-cost remittance services.
ECLAC plans to review national policies in anticipation of
the use of cryptocurrencies like bitcoin, as well as technologies
in the field of digital payments, to determine how they will
impact the region.
Gale and Abed said there are some challenges in the imple-
mentation of the system, including lack of e-commerce-sup-
porting legislation, inadequate technical capability and difficulties
working with some local banks, but they are determined to get
over those hurdles. In T&T, the enabling legislation is relatively
new, and is primarily focused on electronic payments for gov-
ernment systems.
However, widespread use of mobile-phones in the region
and easy availability to facilitate financial payments or transactions
through short message service (SMS) messages and other widely
available systems, means there is scope for acceptance and use
of digital currencies within a relatively short space of time.
Bitcoin uses cryptography-based block-chain technology. At
the core of the system is a ledger that can be used to transfer
title of ownership to units of digital currency. It is largely self
regulating, with features built into the protocol that provide
consumer protection and traceability.
The Bitt co-founders are optimistic that within a matter of
months consumers in several parts of the region will be accessing
bitcoin s fully automated, transferable management ledger.
"We are riding a technology wave with finance that is cutting
costs, making it faster, making it cheaper, making it possible
for people outside of the banking systems to control their money
using their mobile phones," said Abed.
"Our company will provide a regulated environment for these
global services in a compliant way."
BITCOIN
coming to T&T
suzanne.sheppard@guardian.co.tt
SUZANNE SHEPPARD
What is bitcoin?
Bitcoin is an online payment system in-
vented by Satoshi Nakamoto, who pub-
lished his invention in 2008, and released it
as open-source software in 2009.
The system is peer-to-peer; users can
transact directly without needing an inter-
mediary. Transactions are verified by net-
work nodes and recorded in a public
distributed ledger called the block chain. The
ledger uses its own unit of account, also
called bitcoin.
The system works without a central
repository or single administrator, which
has led the US Treasury to categorise it as a
decentralised virtual currency. Bitcoin is
often called the first cryptocurrency, al-
though prior proposals existed. Bitcoin is
more correctly described as the first decen-
tralised digital currency. It is the largest of
its kind in terms of total market value.
Bitcoins are created as a reward for pay-
ment processing work in which users offer
their computing power to verify and record
payments into the public ledger.
This activity is called mining and is re-
warded by transaction fees and newly cre-
ated bitcoins. Besides mining, bitcoins can
be obtained in exchange for fiat money,
products, and services.
Users can send and receive bitcoins for an
optional transaction fee.
Bitcoin as a form of payment for prod-
ucts and services has grown, and mer-
chants have an incentive to accept it
because fees are lower than the two to
three per cent typically imposed by credit
card processors.
Despite a big increase in the number of
merchants accepting bitcoin, the cryptocur-
rency doesn't have much momentum in re-
tail transactions. Unlike credit cards, any
fees are paid by the purchaser, not the ven-
dor.The European Banking Authority and
other sources have warned that bitcoin
users are not protected by refund rights or
chargebacks.
The use of bitcoin by criminals has at-
tracted the attention of financial
regulators,legislative bodies, law enforce-
ment, and media.
They listed money laundering, financing
of illicit activities, theft, fraud, tax evasion,
and use in black markets as possible.
As of 2013, the criminal activities cen-
tered around theft and black markets. Offi-
cials in countries such as the United States
also recognised that bitcoin can provide le-
gitimate financial services to customers.
Source: Wikipedia
OLIVER GALE, BITT CFO
GABRIEL ABED, BITT CEO